What is positive equity on a car loan?

Positive equity means the vehicle is worth more than the remaining loan balance. Equity = estimated market value − estimated payoff balance. If that figure is above zero, the owner can put the difference toward a new vehicle instead of rolling negative balance forward.

How much equity does a trade-in lead need?

EquiLane uses a configurable dollar threshold, defaulting to $3,000. Below that, the equity rarely covers a down payment and tax/title costs, so the lead is scored but not flagged Hot.

When in a loan term is a trade-in most likely?

Between 24 and 48 months. Before 24 months, depreciation has usually outpaced principal paydown. After 48 months, the remaining balance is small and the payment relief argument weakens.

Does credit tier matter for trade-in targeting?

Yes. Prime borrowers close a replacement-vehicle deal most easily, so they carry the highest credit-tier sub-score. Subprime borrowers with equity are routed to rate-improvement offers instead.

How do you find vehicle owners with positive equity for a trade-in?

Short answer

You find trade-in candidates by comparing each vehicle's estimated market value against its estimated loan payoff balance. When market value exceeds payoff, the owner has positive equity that can be applied as a down payment on a replacement vehicle. EquiLane scores every record in the book on that spread and surfaces prime and near-prime borrowers 24-48 months into their loan — far enough in to have built equity, early enough that the loan still has term left to restructure.

What criteria define a trade-in candidate?

Positive equity (market value above payoff balance)
Prime or near-prime credit tier
24-48 months elapsed since purchase
Equity at or above the configured hot threshold ($3,000) to flag as Hot

How is this segment scored?

The 0-100 lead score is a weighted blend of equity (40%), APR spread versus market average (25%), loan age with a 24-48 month sweet spot (20%) and credit tier (15%).

A lead is flagged Hot when equity is at or above $3,000 AND either the APR is above the configured market average (7.5%) or the borrower is prime with 36+ months on the loan.

Key terms

Positive equity: Equity = estimated market value − estimated payoff balance, when the result is above zero.
Equity percentage: Equity % = equity ÷ estimated market value × 100.
Trade-in candidate: A prime or near-prime owner with positive equity inside the 24-48 month loan window.

Questions about trade-in candidates

What is positive equity on a car loan?: Positive equity means the vehicle is worth more than the remaining loan balance. Equity = estimated market value − estimated payoff balance. If that figure is above zero, the owner can put the difference toward a new vehicle instead of rolling negative balance forward.
How much equity does a trade-in lead need?: EquiLane uses a configurable dollar threshold, defaulting to $3,000. Below that, the equity rarely covers a down payment and tax/title costs, so the lead is scored but not flagged Hot.
When in a loan term is a trade-in most likely?: Between 24 and 48 months. Before 24 months, depreciation has usually outpaced principal paydown. After 48 months, the remaining balance is small and the payment relief argument weakens.
Does credit tier matter for trade-in targeting?: Yes. Prime borrowers close a replacement-vehicle deal most easily, so they carry the highest credit-tier sub-score. Subprime borrowers with equity are routed to rate-improvement offers instead.

Related lead segments

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